Drivers paying record high price for diesel - and the cost is rising faster than petrol

The cost of diesel has soared to a record high and wiped out fuel efficiency savings, motoring leaders warned yesterday.

Once the cheaper alternative to petrol, it is now far more expensive.

Figures show diesel is selling at an average £5.20 a gallon (114.25p per litre), compared with unleaded at £4.85 a gallon (106.76p per litre).

While a boom in diesel cars has exacerbated demand for the fuel, refineries have failed to keep pace with producing it.

The AA warns that diesel cars now represent a "falseeconomy" for low-mileage drivers.

A diesel car costs on average£1,400 more to buy than its petrol equivalent.

At the start of this year to break even with an unleaded vehicle, a diesel car had to travel 45,000 miles before the benefits of its greater fuel efficiency took effect.

Today, that same car must cover 46,243 miles - an increase of 1,243 miles.

This is because the price gap between diesel and petrol has widened further since January 1 - from 5.1p to 7.49p per litre.

An AA report found that the average fuel efficiency of eight best- selling UK diesels was 53.95 miles to the gallon - compared to 39.95mpg for the equivalent petrol cars.

For many years until the mid-1990s, diesel not only ran on more miles to the gallon but was also cheaper at the pumps.

It fell out of favour when it was dubbed "dirty diesel" and blamed for pollution and chest complaints.

However, the fuel is now clean thanks to a generation of cars fitted with filters which trap and burn off harmful particles.

Diesel and petrol were last at the same price in June 2007 at 97p per litre.

Huge worldwide demand coupled with a shortage of diesel refineries mean the prices have overtaken petrol.

More than four out of ten new cars sold - nearly a million a year - are now diesels. That compares with just one in seven in 1999.

The jump in demand for diesel cars has been fuelled largely by the Government's road tax policy.

The AA has called on the Government to cut the tax on diesel which also emits less CO2.

The same level of duty is levied on both fuels. Hauliers have complained that diesel is far cheaper on the Continent because they pay less tax.

They say that many governments there levy less duty because they recognise the "green" benefits of using diesel over unleaded petrol.

AA president Edmund King said: "The dash for diesel continues in the UK, with motorists trying to reduce their fuel costs with the added benefit of reduced CO2 emissions.

"But diesel is more expensive than petrol and the differential is growing. So buying a diesel is not an automatic switch to cut-price motoring - particularly at current prices."

The Society of Motor Manufacturers and Traders says the introduction of cleaner diesel cars has been the biggest driving factor in reducing CO2 emissions - and urged ministers to cut the tax on diesel to encourage greater take-up.

The Freight Transport Association said the soaring price of diesel meant that transport industry costs are rising at an annual rate of 8.4 per cent for a 40-ton lorry, stoking up inflation for consumers.

• Gas and electricity bills could rise a further 10 per cent this year if wholesale energy prices continue to increase, it was predicted yesterday.

Price comparison website uSwitch.com said this would increase a typical consumer's dual fuel energy bill by a further £105 to £1,153 a year.

It warned the price of gas on the forward market for next winter is 22 per cent higher than at present, making the cost of procuring energy more expensive for suppliers.